Eye on Advocacy: DSH Advocacy Ramps Up as Congress Faces Shutdown

Congress returned from August recess focused on funding the government and avoiding a shutdown. For essential hospital advocacy, this means heightened attention on key health care "extenders" and ensuring continued support for the safety net. House Republican leaders on Sept. 16 introduced a "clean" continuing resolution (CR) that will fund the government, as well as telehealth and the hospital-at-home programs, through Nov. 20. The pending Medicaid disproportionate share hospital (DSH) cuts would also be pushed to Nov. 20. Congressional Democrats have also unveiled their own funding bill that would have funding go through Oct. 31; it seeks to go beyond extensions of expiring programs to reverse the health care cuts enacted in H.R. 1 and permanently extend enhanced tax credits.

With federal spending under the microscope, especially in Medicaid, America's Essential Hospitals continues to emphasize that Medicaid DSH funding is indispensable. Eliminating the remaining scheduled cuts is the best way to sustain hospitals that care for high-need communities.

More than 250 member hospitals signed an association-led letter sent to Congress on Sept. 17, urging lawmakers to prevent the $8 billion cut to Medicaid DSH payments set to take effect on Oct. 1 absent congressional action.

Additionally, America's Essential Hospitals joined a coalition of health care groups to send a letter to Senate Majority Leader John Thune (R-S.D.), Senate Minority Leader Chuck Schumer (D-N.Y.), House Speaker Mike Johnson (R-La.), and House Minority Leader Hakeem Jeffries (D-N.Y.) on Sept. 5, urging Congress to address the pending cuts.

In the House, 141 members from both parties sent a letter urging prevention of reductions to the Medicaid DSH program to House Speaker Mike Johnson (R-La.) and Minority Leader Hakeem Jeffries (D-N.Y.) this week.

Additionally, Congress must extend Medicare telehealth flexibility and the hospital-at-home program by Sept. 30, which it seems prepared to do based on the Sept. 16 CR. Our advocacy on the issue will continue.

The association also continues to push back against harmful Medicare cuts to hospitals (aka "site-neutral" payments). These proposals, which Congress has eyed to offset other health care priorities in the past, remain a threat in the 119th Congress. In July, the Centers for Medicare & Medicaid Services released its proposed calendar year 2026 Medicare Hospital Physician Fee Schedule rule and Outpatient Prospective Payment System rules, which include extending "site-neutral" cuts to off-campus hospital outpatient departments that provide drug administration services. Such changes would reduce reimbursement to hospital levels equal to physician offices and ambulatory surgical centers, undermining essential hospitals' ability to provide care in their communities. These policies would constitute a cut to essential hospitals and Medicare writ large, and we are educating lawmakers about why they should not be enacted.

At the same time, we are working with bipartisan champions in the House to reintroduce the Reinforcing Essential Health Systems for Communities Act. First introduced in the 118th Congress by Reps. Lori Trahan (D-Mass.) and David Valadao (R-Calif.), this bill would create the first-ever federal definition of "essential health systems," giving Congress a clear tool to direct support to the nation's foundational safety net providers. Discussions also are underway to introduce companion legislation in the Senate. Once introduced, we will ask members to engage their delegations to cosponsor and champion this critical legislation.

If you have any questions about our ongoing advocacy, do not hesitate to reach out to our team directly.